GET DAILY SIGNALSCanadian National Railway (CNI) Delivers +18% EPS Growth in Q3 2026
Key Takeaways
- Canadian National Railway reported third-quarter 2026 adjusted diluted earnings per share (EPS) of C$2.16, up 18% from C$1.83 a year earlier and ahead of the C$2.08 consensus estimate.
- Total revenue rose 15% year over year to C$4.77 billion, roughly C$120 million above analyst forecasts, led by grain and fertilizer, petroleum and chemicals, and automotive shipments.
- The adjusted operating ratio improved to 61.0%, while the reported operating ratio rose to 63.7% mainly because of one-time charges tied to a discontinued technology project and merger-related advisory costs.
- Management reaffirmed its full-year 2026 outlook for mid-to-high single-digit adjusted EPS growth and said results are tracking toward the upper end of that range.
- Free cash flow climbed 25% year over year to C$2.92 billion for the first nine months, supporting continued share repurchases and a quarterly dividend of C$0.915 per share.
Putting the Quarter in Context
Canadian National Railway's third-quarter report offers investors a timely read on North American freight demand, spanning grain, energy, metals, and automotive traffic. After a relatively flat start to 2026, the company delivered its strongest revenue growth of the year, signaling broad-based commercial momentum. As one of North America's largest railroads, CNI's results also serve as a barometer for industrial activity and supply-chain health across Canada and the United States. For shareholders, the quarter matters because it tests whether the company can convert higher volumes into improved efficiency, earnings, and free cash flow while holding the line on capital spending and returning cash to investors. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Breaking Down the Reported Results
For the third quarter ended September 30, 2026, Canadian National Railway reported total revenue of C$4.77 billion, a 15% increase from C$4.17 billion a year earlier. Freight revenue climbed 15% to C$4.57 billion, driven by a 19% rise in grain and fertilizer, a 17% increase in petroleum and chemicals, and a 31% jump in automotive revenue.
Adjusted diluted EPS came in at C$2.16, up 18% from C$1.83 in the prior-year period and above the C$2.08 consensus estimate. Reported (GAAP) diluted EPS was C$2.00, with net income of C$1.21 billion. The gap between adjusted and reported figures reflected roughly C$132 million in pre-tax one-time items, including a C$118 million asset impairment for discontinued technology components and C$14 million in advisory costs tied to regulatory review of a proposed rail merger.
Revenue ton miles (RTMs), a measure of freight volume that accounts for distance, rose 4%. The reported operating ratio, which measures operating expenses as a percentage of revenue, increased to 63.7% from 61.4%, but the adjusted operating ratio improved to 61.0% from 61.4%, reflecting underlying cost discipline. Free cash flow for the first nine months reached C$2.92 billion, up 25% year over year.
Market Reaction and Investor Sentiment
Shares of CNI were relatively muted in early trading following the report, holding near their recent levels after having drifted roughly 6% off a 52-week high reached earlier in the fall. The modest move suggests the market had already priced in a solid quarter, particularly after management signaled following the second quarter that full-year results could land toward the higher end of guidance.
Investor attention centered on the apparent deterioration in the reported operating ratio, a metric closely watched in the rail industry. However, the increase was largely the result of one-time charges rather than a decline in day-to-day efficiency, and the adjusted figure actually improved. That distinction reinforced the view that the underlying business gained momentum even as headline profitability appeared softer.
Forward Outlook and Key Factors to Monitor
Looking ahead, Canadian National Railway reaffirmed its 2026 guidance for low single-digit growth in revenue ton miles and mid-to-high single-digit growth in adjusted diluted EPS. Management indicated results are tracking toward the upper end of that range, supported by continued strength in grain, energy, and other freight categories.
Investors will be watching several factors in the quarters ahead. Grain and fertilizer volumes remain a key swing factor, tied to crop production and export demand. Energy-related shipments, including refined products, crude, and natural gas liquids, continue to serve as a near-term growth driver. The company also highlighted a planned agreement with Union Pacific to extend CN's reach into Mexico, which could open additional cross-border freight opportunities over time.
On the cost side, the company expects its "Fast Track" productivity initiative to carry benefits into next year, with roughly C$120 million realized year to date. Capital intensity is described as normalized relative to North American peers, and management has noted available network capacity, including more than 200 stored locomotives, to absorb additional volume efficiently. Monitoring pricing relative to rail cost inflation, operating-ratio trends, and free cash flow generation will remain central to evaluating how CNI converts volume growth into shareholder value. From what I see, the productivity gains and network capacity stand out as important supports for the outlook.
Using Tickeron AI Tools in My Analysis
In my research process, I frequently rely on Tickeron’s AI Screener to filter rail and industrial names by fundamentals, technical patterns, and AI-driven signals. It helps surface comparable opportunities quickly without manual screening. I also cross-check volume trends and peer performance with the platform’s other AI features when evaluating names like CNI. This approach keeps my review structured and efficient.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
CNI's Indicator enters downward trend
The Aroon Indicator for CNI entered a downward trend on October 19, 2026. Tickeron's A.I.dvisor identified a pattern where the AroonDown red line was above 70 while the AroonUp green line was below 30 for three straight days. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options. A.I.dvisor looked at 190 similar instances where the Aroon Indicator formed such a pattern. In 115 of the 190 cases the stock moved lower. This puts the odds of a downward move at 61%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 36 of 65 cases where CNI's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 55%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where CNI declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 51%.
CNI broke above its upper Bollinger Band on October 22, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 14, 2026. You may want to consider a long position or call options on CNI as a result. In 47 of 107 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 44%.
The Moving Average Convergence Divergence (MACD) for CNI just turned positive on October 12, 2026. Looking at past instances where CNI's MACD turned positive, the stock continued to rise in 27 of 54 cases over the following month. The odds of a continued upward trend are 50%.
CNI moved above its 50-day moving average on October 21, 2026 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for CNI crossed bullishly above the 50-day moving average on October 27, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 8 of 15 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 53%.
Following a +1.93% 3-day Advance, the price is estimated to grow further. Considering data from situations where CNI advanced for three days, in 125 of 311 cases, the price rose further within the following month. The odds of a continued upward trend are 40%.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 44 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 45 (best 1 - 100 worst), indicating steady price growth. CNI’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 59 (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of 75 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of 81 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.412) is normal, around the industry mean (3.920). P/E Ratio (15.878) is within average values for comparable stocks, (15.847). Projected Growth (PEG Ratio) (2.437) is also within normal values, averaging (7.261). Dividend Yield (0.021) settles around the average of (0.025) among similar stocks. P/S Ratio (5.747) is also within normal values, averaging (3.592).
The Tickeron Profit vs. Risk Rating rating for this company is 87 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. CNI’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 59, placing this stock worse than average.
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General Information
a provider of railroad transportation services
Industry Railroads
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